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Investors launch £4bn RBS compensation claim

RBS Branch 480

Thousands of investors are suing the Royal Bank of Scotland for nearly £4bn alleging it misled shareholders over a 2008 rights issue.

The RBOS Shareholder Action Group contains more than 12,000 shareholders and 100 institutional investors. It is also targeting senior executives including Fred Goodwin, Tom McKillop, Johnny Cameron, and Guy Whittaker.

The action group claims the bank’s directors misled shareholders by misrepresenting the underlying strength of the bank and omitting critical information from the 2008 rights issue prospectus. The Government purchased 82 per cent of the bank just months later to save it from collapse.

It means that RBS could be liable for the losses incurred on shares subscribed in the rights issue, through breaches of Section 90 of the Financial Services and Markets Act 2000.

RBS has 30 days to respond to the claim.

A statement from the investors says: “Today represents a giant step forward for the many thousands of ordinary people who lost money as the result of inexcusable actions taken by banks and their directors in the financial crisis. Now, for the first time, some of these directors will have to answer for their actions in a British court”.

RBS refused to comment.

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. I really do wish the shareholders luck and I hope that they recover some of their losses from the incompetent bankers like Fred Goodwin.

    It just a shame that normal investors are having to go to court to teach incompetent bankers a lesson, I also hope Fred Goodwin’s legal bill is extremely large!

  2. Captain Runaway 3rd April 2013 at 2:09 pm

    Bank Clerk: How can I help you, young man?
    Stan Marsh: I got a hundred-dollar check from my grandma and my dad said I need to put it in the bank so it can grow over the years
    Bank Clerk: Well, that’s fantastic. A really smart decision, young man. We can put that check in a money market mutual fund, then we’ll re-invest the earnings into foreign currency accounts with compounding interest aaaand it’s gone.
    [Clerk stares blankly]
    Stan Marsh: Uh… what?
    Bank Clerk: It’s gone, it’s all gone.
    Stan Marsh: What’s all gone?
    Bank Clerk: The money in your account. It didn’t do too well, it’s gone.
    Stan Marsh: What do you mean? I-I have a hundred dollars!
    Bank Clerk: Not any more, you don’t. Poof!
    Stan Marsh: Well what can I do to get back my…
    Bank Clerk: [Interrupts] I’m sorry, sir, but this line is for bank members only.
    Stan Marsh: I just opened an account!
    Bank Clerk: Do you have any money invested with this bank?
    Stan Marsh: No, you just lost it all!
    Bank Clerk: Then please stand aside for people who actually have money with us. Next please!

  3. Last time i looked it will be taxpayers picking up the bill.

  4. Let’s not forget that Government approval was required for the share sale so it’s not just the bankers who are culpable..!

  5. I have some sympathy for all the shareholders who have lost their investment at RBS.
    I agree that compensation should be sought from those responsible but suggest that it be paid after the bank is back in profit and the tax payer funded rescue package is reimbursed.
    I would like to see the government make a statement on this issue and keep the public informed.

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